It's Still a Golden Age of Dividend Investing

Some see this golden age of dividend investing ending. Companies are taking on debt—and using it to reward shareholders rather than invest in their business and expand it further. But we’re talking about the market as a whole—some companies have done well and some haven’t. Many companies in the energy sector slashed or eliminated dividends entirely during the oil bear market of the past two years. But, if you know where to look, there’s still plenty of opportunity to invest in quality, income-producing stocks. While the average S&P 500 stock trades at 24 times earnings, closing in on bubble territory, there are still many individual oversold opportunities.

What do I like in the dividend space? Income growth. A company that can consistently raise dividends year over year is likely to be the kind of company that has other characteristics that make it worth owning for the long haul for growth prospects as well. What’s more, dividend growth is easy for investors to understand. It means an increasing amount of cash coming your way every year. It’s not like a company’s earnings growth or share price growth, which can fluctuate wildly. It’s a more consistent growth, provided you’re willing to buy for the long haul. It’s a golden age of investing. And while it might be under pressure from rising interest rates, if you’re investing in the right space, regulatory and tax reform could lead to substantial increases in payouts over the next few years.

Source: Newsmax

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